Questions and Answers 1 - 29 NSLDS and FAT PROCESSING Questions and Answers July 1996 FINANCIAL AID TRANSCRIPT REQUIREMENTS Q1 Why are there regulatory requirements for schools to determine whether or not an applicant for Title IV student assistance had previously attended an eligible institution [34 CFR 668.19(a)(1)] and, if so, to request a financial aid transcript (FAT) from any such institution [34 CFR 668.19(a)(2)(i)]? A1 The FAT regulations were developed to make certain that schools had all of the information necessary to enforce both student eligibility provisions and to be in compliance with program-specific award maximums contained in the Higher Education Act of 1965, as amended (HEA). The law and supporting regulations provide that, among other eligibility criteria, an applicant for Federal student aid cannot be in default on a Title IV student loan or owe an overpayment on Title IV aid. Additionally, the Pell Grant and loan programs have annual and/or aggregate award maximums that must be considered when awarding Title IV aid to students that transfer into one eligible institution from another. Q2 Can an institution use data from the NSLDS for purposes of obtaining information previously collected through the paper FAT process? A2 Yes, beginning with the 1996-97 award year, schools may use information from the National Student Loan Data System (NSLDS), including NSLDS information included on a Student Aid Report (SAR) or contained in the NSLDS History section of an Institutional Student Information Record (ISIR), instead of requesting paper FATs as required in 34 CFR 668.19(a)(1) and (2)(i) of the Student Assistance General Provisions regulations. The Secretary will publish a notice with respect to this determination in the Federal Register within the next few weeks. Note: Use of the NSLDS for FAT information is limited for mid-year transfer students. Please see the discussion on this topic that begins with Q&A #40. Q3 Can a school continue, for the 1996-97 processing year, to request paper FATs in accordance with the current regulations even though the NSLDS is available? A3 Yes, although the Department would prefer that schools use the FAT capabilities of the NSLDS, we are not, at this time, requiring schools to use the NSLDS to meet the FAT requirements of the regulations. However, all schools, even those that will be requesting paper FATs from other schools, are responsible for any default or overpayment information indicated on the SAR or in the ISIR by 'C' codes and corresponding comments. Q4 Are there instances when a school will be required to request FAT information directly from a previously attended institution? A4 Yes, as discussed beginning with Q&A #40, the utility of the NSLDS for students who transfer during an award year (mid- year transfers), is limited. In some instances, FAT data for mid- year transfers will need to come directly from the previously attended school. The Department is working with the financial aid community to develop future enhancements to the NSLDS that will increase its usefulness in providing timely FAT information for mid-year transfers. Q5 If a school determines that it must obtain FAT information directly from another school, is the current paper FAT the only way to obtain the needed information? A5 No, a school may use any reasonable method to obtain the needed information as long as it maintains proper documentation. The paper FAT currently in use by the financial aid community is one acceptable method. Other methods include written documentation such as letters or FAXs, as long as they contain all of the FAT information required by the regulations. All such documentation must contain the signature of the official authorized by the previous school to provide FAT information. Note that the use of electronic mail messages is not allowed since there is no opportunity for signatures to be affixed to such messages. Q6 Since there will be instances when FAT information will be requested of one school by another (or by a student), what are the responsibilities of the requesting institution while it is awaiting the receipt of the FAT? A6 There are no changes to the responsibilities of an institution requesting an FAT. If an institution determines that it needs FAT information directly from another school, it must comply with the provisions of §668.19(a)(3) through (5) of the regulations that relate to requesting an FAT and the further processing of a student's aid application. Q7 What are the responsibilities of a school that receives a request for FAT information from another school or from a student? A7 There are no changes to the responsibilities of a school that receives a request for an FAT from another school or from a student. Institutions that receive FAT requests must comply with the provisions of §668.19(b), (c), and (d) of the regulations that relate to providing requested FAT information. The regulations do not allow a school to meet its responsibility to provide FAT information by sending the requesting school a copy of FAT information received from the NSLDS. USE OF THE NSLDS FOR FAT PURPOSES Q8 What is the NSLDS? A8 The National Student Loan Data System (NSLDS) is a comprehensive database containing selected Federal financial aid history information on recipients of student assistance authorized under Title IV of the Higher Education Act of 1965, as amended (HEA).NSLDS and FAT Q9 May a school use the Financial Aid History information included on a Student Aid Report (SAR) or in the NSLDS Financial Aid History section of the Institutional Student Information Record (ISIR) rather than requesting paper financial aid transcripts as is currently required in the regulations? A9 Yes, the financial aid history information on the SAR and in the ISIR can be used by schools to meet the regulatory requirements as discussed in Q&A #2. Please refer to the discussion of the use of the SAR and ISIR for FAT purposes beginning with Q&A #23. Also note that the use of the NSLDS for mid-year transfer students is limited. These limitations are discussed beginning with Q&A #40. Q10 Before using the NSLDS for FAT purposes, must a school continue to determine whether an applicant for Title IV aid previously attended another eligible institution as is required in the current regulations [§668.19(a)(1)]? A10 No, for students transferring from one institution to another at the beginning of an award or academic year, it can be assumed that all required information will be in the NSLDS. Therefore, for such students there is no need to determine if the applicant previously attended another eligible institution. If there are data reported out of the NSLDS the school can safely use it to determine eligibility and award amounts, unless it has conflicting information. (see Q&A #14) If there are no FAT data reported out of the NSLDS, the school can assume that either the student had never attended another eligible institution or he or she had attended but had not received any of the Title IV funds applicable to the FAT requirements. However, because of delays in the submission of data to the NSLDS from lenders and guaranty agencies, and schools; if a student begins enrollment at a school during an award or academic year the institution may need to obtain FAT information directly from the student's previously attended schools. In that case, the school would need to determine if and where the student previously attended an eligible institution. Please see the discussion of mid-year transfers beginning at Q&A #40. Q11 Does the answer to the previous question mean that a school must access the NSLDS for FAT information for all of its Title IV applicants regardless of whether they transferred into the institution or not? A11 In instances where the school must access NSLDS data directly, rather than relying upon the information provided on a SAR or ISIR, (such as when eligibility for potential mid-year transfers is being determined - see discussion beginning at Q&A #40), the school may develop an alternative process in which it does not access the NSLDS when it is certain that an applicant had never attended another eligible institution. However, if a school chooses not to check the NSLDS for such students, it will be liable in the event that the student was not eligible for all or a portion of any aid received. Q12 Must a school access the NSLDS just prior to the disbursement of Title IV aid, if it had used the information provided on the SAR or ISIR to determine eligibility? A12 No, a review of the SAR and ISIR is sufficient to meet the FAT requirements for determining eligibility and award amounts. Note that schools must respond to any changes to a student's financial aid history of which the school later becomes aware. A school will most likely obtain new information when it receives a subsequent SAR or ISIR for a student. See Q&A #32 for additional information on subsequent SARs and ISIRs. Q13 What are a school's responsibilities and possible liabilities if a student received Title IV aid not recorded in the NSLDS, or if the student was in default or owed an overpayment, and that information was not available from the NSLDS at the time the SAR and ISIR were produced? A13 A school will only be responsible for the financial aid history information it had obtained from the NSLDS at the time it determined a student's eligibility. A school will not be held liable for any Title IV aid it disbursed to a student, even if subsequent information from the NSLDS (or other reliable sources) indicates that the student was not eligible for all or a portion of that aid, unless the school had access to conflicting information that showed a lack of, or reduced, eligibility of the student. Once a school becomes aware, through the NSLDS or any other means, that a student is not eligible and/or was not eligible for aid previously disbursed, it must (1) not disburse or deliver additional funds and (2) assist the Department or lender in requiring the student to make arrangements to repay any funds the student was not eligible to receive. Q14 Is a school responsible for reconciling financial aid history information it receives from the NSLDS with data it had previously obtained from paper FATs? Also, does the above reference to the school "having access to conflicting information that would show a lack of, or reduced, eligibility of the student" include information the school has in its records from paper FATs collected in prior years? A14 No, schools are not required to reconcile information from previously obtained FATs with data from the NSLDS. Generally a school can rely upon the data in the NSLDS as being accurate and replacing any information it may have received earlier. However, if a school has information that it has reason to believe may be more current or more accurate than that provided by the NSLDS on the SAR or ISIR, it must resolve the conflicting information before releasing additional Title IV aid. Such new information could come from the student, from a previous school, from a lender or guaranty agency, from the Department, or from any other reliable source. Q15 Since schools are not required to check directly into the NSLDS after using FAT data from a SAR or ISIR, what happens if subsequent to the initial review, a new SAR or ISIR (or any other reliable source) provides information that makes the student ineligible for all or a portion of the aid received? A15 Once a school becomes aware, through the NSLDS or any other means, that a student was not eligible for aid previously disbursed, it must not disburse or deliver additional funds. It must also calculate the amount of any overpayment received by the student in the Pell Grant and campus-based programs and then follow the regulatory requirements for the treatment of overpayments, including the reporting of the overpayment to the NSLDS. A student that owes an overpayment is not eligible to receive further Title IV student assistance unless satisfactory repayment arrangements have been made. Note that, because of the monitoring features of the Pell Grant payment system, any ineligibility that was caused by the student receiving more than 100% of his or her scheduled award would result in an automatic reduction in the institution's Pell Grant authorization level. If a school determines that a student was not eligible for all or a portion of an FFELP or Direct Loan previously disbursed, it must immediately notify the lender in the case of an FFELP loan, or the Servicer in the case of a Direct Loan, so that contact can be made with the student. Such a student is not eligible for any further Title IV student aid until the excess loan funds have been repaid or satisfactory arrangements to repay them have been made with the holder of the loan. The student can regain eligibility for Title IV aid by either repaying in full any Pell overpayment, campus-based overpayment, or FFELP or Direct Loan funds for which he or she was not eligible, or by making arrangements satisfactory to the holder to repay the overpayment or excess loan funds. Q16 What happens when, in a subsequent award year, a school determines, from information provided during that year's application process that a student was not eligible for all or some of the Title IV aid disbursed in the prior year? A16 Anytime a school determines that a student was not eligible for Title IV aid received, no matter when that aid was disbursed, it must not disburse any additional aid and must comply with the regulations related to overpayments and ineligible student loan disbursements. Schools must follow the procedures discussed in Q&A #15. Q17 In the responses to the two previous questions it was stated that, if a student received Title IV aid for which he or she was not eligible, the school that identified the ineligibility must place the student into an overpayment status and/or report an ineligible loan disbursement to the lender or Direct Loan Servicer. If the cause of the ineligibility was that the student borrowed in excess of either an annual or aggregate loan amount, what must be repaid (or agreed to be repaid) by the student before he or she can regain eligibility for additional Title IV assistance? A17 Although any aid received after a student received loan funds that exceeded a loan maximum should be repaid, if the receipt of excess loan proceeds was inadvertent on the student's part, only the amount of any loan proceeds that exceeded the annual or aggregate program maximum must be repaid by the borrower. Additionally, in accordance with §668.35(b)(2), the student may regain eligibility for additional Title IV aid by making arrangements, satisfactory to the holder of the loan, to repay the excess loan amount. Note that, unlike loan default situations, this accommodation does not require six monthly payments, and the holder of the loan may choose to develop a repayment plan that has the borrower reaffirm that he or she will repay the excess according to the terms of the promissory note. GENERAL INFORMATION ON THE NSLDS Q18 What kinds of data are in the NSLDS? A18 The NSLDS contains detailed information on all Title IV student loans [Federal Family Education Loan Program (FFELP), William D. Ford Federal Direct Loan (Direct Loan) Program, and the Federal Perkins Loan Program (Perkins)], payment information for the Federal Pell Grant Program (Pell Grant), and overpayment information for the Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), and Perkins Loan programs. Q19 Why are there no data in the NSLDS for Federal Work Study (FWS), FSEOG (other than for overpayments), or the State Student Incentive Grant programs? A19 There are no data in the NSLDS for these programs because none of them have statutory or regulatory constraints that need monitoring before a student may continue to receive Title IV aid. Remember that the statutory annual award maximum in FSEOG only applies to the school making the award and not to any aggregate amount awarded among schools the student may attend during an award year. Q20 Does the NSLDS contain information on other Federal non- Title IV programs or on state student assistance programs? A20 No, only data from selected Title IV programs are included in the NSLDS. Discussions have been held with the Department of Health and Human Services (HHS) on the possibility of loading data from its student aid programs into the NSLDS in future years. There are no plans at this time to include data from states or from other providers of student assistance. Q21 Does the NSLDS contain enrollment information for students attending postsecondary educational institutions? A21 The NSLDS is a database of selected Federal student aid information. It currently contains limited enrollment information only for periods of attendance during which a student received a Pell Grant or Title IV loan or was in an in-school deferment status on a Title IV loan. The NSLDS does not currently contain enrollment information for any student who is not a Title IV aid recipient or for any Title IV recipient for periods of attendance when the student did not receive a Pell Grant or a Title IV loan or a loan deferment. Additional enrollment information will be available on some recipients of FFELP or Direct Loan Program loans when the new Student Status Confirmation Report (SSCR) process of the NSLDS is fully implemented. ACCESS TO NSLDS DATA Q22 How can a school access financial aid history information contained in the NSLDS? A22 There are five methods by which a school can obtain FAT information from the NSLDS. 1. From the NSLDS Financial Aid History page of Part 1 of a Student Aid Report (SAR). A sample of the SAR NSLDS page is included as an enclosure to this Dear Colleague Letter. 2. From the NSLDS Financial Aid History section of the Institutional Student Information Record (ISIR) sent to a school either through the Title IV Wide-Area Network (TIV- WAN) or on magnetic tape or cartridge. A copy of the ISIR Record Layout is included as an enclosure to this Dear Colleague Letter. 3. From a data file of NSLDS financial aid transcript records transmitted to the school in response to a request from the school for selected FAT records. Using the TIV-WAN, a school can submit a file of student identifiers to the NSLDS and will receive the FAT information for those students in an electronic file which then can be used by the school's local automated processing system. The record layouts for both the batch request file and the FAT data file are included in the enclosed NSLDS Financial Aid Transcript documentation. 4. From a print file of NSLDS financial aid transcript records transmitted to the school in response to a request from the school for selected FAT records. Using the same batch request process as discussed above for the FAT data file, the school will receive the FAT information for students in a print file which then can be used to print hard copies of the NSLDS FAT. The record layouts for the batch request file as well as a facsimile of the NSLDS FAT produced from the batch print file are included in the enclosed NSLDS Financial Aid Transcript documentation. 5. By logging into the NSLDS through the TIV-WAN and requesting a real-time screen display of the NSLDS financial aid transcript. A facsimile of the NSLDS FAT screen is included in the enclosed NSLDS Financial Aid Transcript documentation. Q23 What is reported on the NSLDS Financial Aid History page of the SAR and the NSLDS Financial Aid History section of the ISIR if the attempt to find a match between the Social Security Number reported by the applicant on the financial aid application (FAFSA) and the NSLDS fails? A23 There will be instances when the Central Processing System (CPS) match with the NSLDS will not result in FAT data being returned to the CPS. When this happens the NSLDS Financial Aid History page of the SAR will be blank. Similarly, there will be no data in the NSLDS Financial Aid History section of the ISIR. Q24 If there is no NSLDS Financial Aid History page of the SAR printed or no data included in the NSLDS Financial Aid History section of the ISIR, can the school assume that the student did not receive any Title IV aid? A24 There are three instances when NSLDS data will not be included on the SAR and ISIR. In two of these instances the SAR and ISIR will contain one of two comments and comment codes that explain the reason for the lack of NSLDS FAT information. The responsibilities of the school, as discussed below, will depend upon which comment code is reported. When the SAR and ISIR do not include any NSLDS information and there is no comment code to provide explanation, the school can assume that the NSLDS found a confirmed match for the applicant but there was no relevant data to report. This could happen when the only information in the NSLDS is for closed loans or for a Pell Grant from a prior year. In these cases the school can continue to process the application unless it has information that is in conflict with this assumption. Q25 What are the school's responsibilities when the reason no NSLDS FAT information was returned to the CPS is explained by Comment Code #140? A25 Comment Code #140 will be included on the SAR and in the ISIR when the CPS match of the applicant's SSN with the NSLDS does not find any corresponding records in the NSLDS with the same social security number. The text for Comment Code #140 is as follows: Your application record was matched successfully with the National Student Loan Data System (NSLDS). The NSLDS confirmed that your social security number is not associated with any previous financial aid history. If the reason there were no NSLDS FAT data returned to the CPS is explained by Comment Code #140, the school can continue to process the application assuming that the student had not received any relevant Title IV aid. Q26 What are the school's responsibilities when the reason no NSLDS FAT information was returned to the CPS is explained by Comment Code #138? A26 Comment Code #138 will be included on the SAR and in the ISIR when the CPS match with the NSLDS finds a record in the NSLDS with the reported SSN but neither the first three letters of the first name nor the date of birth match with the CPS applicant record. When Comment Code #138 is reported on the SAR and in the ISIR, a 'C' code will also be included. The text for Comment Code #138 is as follows: We matched your social security number (SSN) with the National Student Loan Data System (NSLDS), but the name on the NSLDS record did not match the name you reported on your student aid application. Therefore this SAR does not contain the financial aid history that is associated with your reported SSN. You should review both your name and SSN as reported, and work with your FAA to resolve discrepancies. When the reason there were no NSLDS FAT data returned to the CPS is explained by Comment Code #138, the school must determine if the existing NSLDS record is that of the applicant and, if so, must use the information in the NSLDS when determining eligibility for Title IV aid. The school should access the NSLDS directly (the most efficient way would be to utilize the on-line access through the TIV-WAN as described in item #5 of Q&A #22) to determine if the matched SSN in the NSLDS belongs to the selected applicant. The school must make a determination of whether or not the record in the NSLDS is the applicant's by considering information it has about the applicant and the detail of the data contained in the NSLDS. For example, if the name of the student as reported on the SAR or ISIR is a nickname and the name in the NSLDS is the applicant's actual name, the school should use the information in the NSLDS when determining the student's Title IV eligibility. Similarly, if the school has information that the applicant attended XYZ University during the 1995-96 award year and the NSLDS record shows that Title IV aid was received at XYZ University during that same award year, it may assume that the data in the NSLDS belong to the applicant. In many cases, the school will need to discuss the discrepancy with the applicant before making its final decision. If, as a part of the process whereby the school determines that the data in the NSLDS are those of the applicant, it also determines that the failure to match on name or date of birth is because the student did not complete the application properly (using a nickname or reporting the wrong date of birth for example), it should instruct the applicant to make any necessary corrections to the CPS record, using the SAR or ISIR correction process. However, the school need not await the results of those corrections before using the reviewed data in the NSLDS for determining the student's eligibility. If the school, after reviewing the data in the NSLDS, determines that it is not the applicant's financial aid history, it can continue to process the application assuming that the student had not received any relevant Title IV aid. In this instance, while it is not required to do so, the school may want to contact the agency that submitted someone else's information to the NSLDS using the applicant's social security number. The Department is currently attempting to facilitate the process whereby schools that discover problems in records contained in the NSLDS could refer them to a central source for resolution. Q27 What happens if, during the NSLDS FAT batch submission processes (See items #3 and #4 in Q&A #22), the NSLDS cannot find FAT data to return to the school? A27 If the NSLDS FAT batch submission process that produces either the data file or print file (See items #3 and #4 in Q&A #22) cannot find FAT data to return to the school, a flag will be returned in the data record indicating the reason there were no data returned. The aid administrator should then proceed according to the discussion contained in Q&As #24, #25, and #26. Q28 Will the NSLDS information reported note which school the student attended when the aid was received? A28 No, with the exception of the listing of defaulted loans and recent loans as discussed in Q&A #30, the data that are returned to the school by any of the methods discussed in Q&A #22 are presented by student record and will be aggregated for all schools that awarded or disbursed Title IV student aid to that student. If a school wants more detail it can access the NSLDS directly to determine where the student was enrolled when he or she received the aid reported. Q29 Does the answer to the above question mean that the FAT data reported out of the NSLDS will include aid awarded and disbursed by the institution reviewing or requesting the record? A29 Yes.